Enbridge adjusted earnings beat expectations, but pace not expected to last

CALGARY – Enbridge Inc. (TSX:ENB) on Wednesday reported higher first-quarter adjusted earnings that beat expectations, but warned it doesn’t expect that pace to last.

The Calgary-based pipeline giant posted profits of $488 million, or 62 cents per share — beating the average analyst estimate by 10 cents per share, according to Thomson Reuters.

During the same period a year earlier, Enbridge earned $373 million, or 49 cents per share.

“Although we’re pleased with that result, we don’t expect this pace will be maintained through the year,” CEO Al Monaco told analysts on a conference call.

“As a result we’re holding our (earnings per share) guidance range at $1.74 to $1.90 a share and if we’re able to achieve the mid-point of this range it would represent a 12 per cent increase over 2012.”

Enbridge’s net earnings, a measure that includes one-time items such as hedging gains and losses, were $250 million, or 31 cents per share, compared with $261 million, or 34 cents per share a year earlier.

Revenue for the quarter totalled $8.02 billion, up from $6.63 billion in the first quarter of 2012.

Monaco says Enbridge has customer support to expand its Alberta Clipper pipeline between Hardisty, Alta., and Superior, Wisc., to 800,000 barrels per day by 2015.

Doing so will involve amending the presidential permit it obtained to build the pipeline a few years ago. Pipelines that cross the Canada-U.S. border require U.S. State Department approval.

Enbridge rival TransCanada Corp. (TSX:TRP) has spent several years trying to obtain a presidential permit to build its controversial Keystone XL pipeline from Alberta to U.S. markets. That project has faced numerous headwinds in the form of political manoeuvring and environmental opposition.

Monaco said he doesn’t foresee the same challenges for the Alberta Clipper amendment, since it involves increasing pumping capacity on an existing pipeline, not building an all new one.

Enbridge’s Northern Gateway pipeline — a contentious proposal to ship oilsands crude to the West Coast for export — was scarcely mentioned on the analyst conference call.

However, it’s expected to be a focus at Enbridge’s annual general meeting in Calgary later Wednesday, where several project opponents are expected to speak.